Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with ribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 9% per year, which alternative hould be selected? Method First Cost M&O Cost, per Year Salvage Value Life DDM $-100,000 $-30,000 $2,000 3 years LS $-300,000 $-5,000 $15,000 6 years

Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with ribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 9% per year, which alternative hould be selected? Method First Cost M&O Cost, per Year Salvage Value Life DDM $-100,000 $-30,000 $2,000 3 years LS $-300,000 $-5,000 $15,000 6 years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with
tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates
associated with each alternative are shown below. Using a MARR of 9% per year, which alternative
should be selected?
Method
First Cost
M&O Cost, per Year
Salvage Value
Life
DDM
$-100,000
$-30,000
$2,000
3 years
LS
$-300,000
$-5,000
$15,000
6 years

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